Unaffordeable Care Act raises cost of coverage for Texans

Texas Tribune:

The Affordable Care Act will increase the average cost of insurance premiums, making health care less affordable for those Texans on whom the system financially depends, according to a report from a conservative think tank.

The report, released Monday by the Texas Public Policy Foundation, says premiums for health insurance plans will increase for young, healthy Texans under the Affordable Care Act, also known as Obamacare. The health care law requires private insurers to cover essential health benefits and establishes a federal marketplace for insurers to sell coverage plans, among other requirements.

The report concludes that premiums will be on average "significantly higher than coverage available on the individual market in Texas prior to the ACA." Nonetheless, it concedes that comparing pre- and post-ACA health care plans “presents some difficulties” because of the costs associated with mandating that health plans cover essential benefits, and because the impact on individuals will vary depending on age, gender, location and other factors.

As an example, the report highlights changes in premiums for catastrophic plans for young people living in metropolitan areas. Catastrophic plans have lower premiums than comprehensive plans but provide protection only from worst-case scenarios. John Davidson, the report’s author, said those plans are the most attractive to young, healthy Texans, and that they operate “the most like insurance” of any health care plan in the insurance marketplace.

“For a 27-year-old, non-smoking male in Austin, low-cost catastrophic plans on the exchange, which are available only to those under 30 or those with low incomes who qualify, will be on average 84 percent more expensive than pre-ACA catastrophic plans,” the report found.
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The TPPF report says many Texans in their late 20s and early 30s will not qualify for subsidies because their incomes are too high. “Young, working Texans are most likely to bear the brunt of these higher costs,” the report says. “Premiums for ACA-compliant plans for Texans in their late 20s and early 30s are significantly higher than pre-ACA plans currently on the individual market.” The report says that those individuals have little incentive to follow the ACA mandate that they enroll in an insurance plan, and predicts that many will instead opt to pay a fine rather than sign up for a plan.
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Rush Limbaugh has pointed out that the IRS has no ability to collect the tax except by deducting it from any refund.  Since many of those who are buying their own insurance make quarterly payments to the IRS rather than have taxes withheld from a pay check, they can avoid the penalty by making sure they don't overpay their quarterly filings.

A catastrophic policy should usually be paired with a health savings account where the person can place money in a tax free account for use in making routine medical expenses.  Ideally the account would be large enough to cover the deductible  portion of the insurance policy.